Monday, October 04, 2021 / 08:40 AM / by CITN / Header Image Credit: Ecographics
1.0. Adjudication of Stamp Duty
Process of Adjudication
It is the right of the taxpayer to seek the opinion of
the Commissioner of stamp duties as to the amount of duty chargeable or payable
on his instrument. When a person seeks the opinion of the Commissioner as to
the amount of the duty chargeable, he is making an application for
adjudication. Any taxpayer may require the Commissioner to express his opinion
on the liability to the duty or the actual amount due, and as far as the
opinion is duly expressed, the instrument may then be stamped with the amount determined.
Where the instrument is not chargeable to duty, a
stamp to show that no duty is charged must be impressed on such instrument to
prove its acceptability in court or otherwise. For that purpose, applicants
have to furnish the facts and circumstances affecting the amount of stamp duty
chargeable together with hard copies of the instrument and other supporting
documents. The duty assessment is made according to the rates provided under
the laws as may be revised from time to time by a resolution of the National
Limitation of Adjudication
- Adjudication cannot authorize the stamping of an instrument after execution
which by law can only be stamped before execution. Where the Court has ruled
that an instrument is not duly stamped, subsequent adjudication cannot make it
- The adjudication process cannot prejudice rights that have been asserted and
relied upon before it. This means that no two commissioners are permitted to
adjudicate on one particular document once his counterpart has done so.
Rights of Taxpayer in Respect of Stamp
- Right to apply for adjudication from the commissioner of stamp duty and be
issued a certificate indicating the expression of the commissioner's opinion.
- Right to appeal against any duty assessment issued in respect of his
instrument. Any person dissatisfied with the assessment of the Commissioner may
challenge it by appealing to the Tax Appeal Tribunal established under Section
59 FIRSEA or he can appeal to the Federal High Court or the High Court of the
state if the assessment was issued by the State Commissioner of Stamp duties
within 21 days of such assessment and the payment of the duty. Where the Court
decides that the assessment of the Commissioner is wrong, the Court is required
to assess the correct amount of duty and the person shall pay the difference or
get a refund where the amount already paid is more than the re-assessed amount.
- Right to be educated on any provision of the Stamp Duties Act by the
Commissioner of Stamp Duties or any of his staff.
2.0. Instruments Not
An instrument is considered to be improperly stamped
where it does not carry the correct duty. An instrument that is not properly
stamped may still be effective because failure to stamp a document is not an
offence in itself; however, an improperly stamped document is inadmissible in a
Court of Law. Also, the FIRS or a state revenue authority cannot sue for duty
on an unstamped instrument.
Implications of an Improperly Stamped
The following are the implications of non-stamping of
an instrument that is required to be stamped:
- Such an instrument that is not duly stamped in accordance with the law in force
at the time it was first executed shall not be given in evidence. This
disadvantage cannot be remedied by an agreement between the parties in such a
an instrument is not admissible whether directly or for a collateral purpose.
- Cross-examination upon an unstamped document is not allowed.
Exceptions to the Admissibility Rule
The unstamped or improperly stamped instrument may
however be admitted under the following conditions;
- Instruments tendered in evidence in criminal proceedings may be admitted
despite not being duly stamped.
- Any instrument needed to prove an act of bankruptcy
- Where it is imperative to refresh the memory of a witness
- Where it may be used to prove fraud
- Where a plaintiff is trying to prevent a transaction from being implemented if
it is believed that the agreement is void
- Where the instrument may be admitted subject to an undertaking that the
instrument would be stamped later.
3.0. Contributions of
Stamp Duties to Tax Revenue in Nigeria
Stamp Duty is an excellent source of revenue to both
the Federal Government and State Governments. The Federal Inland Revenue
Service, for instance, from January 2015 to July 8, 2020, was able to collect
stamp duties to the tune of =N=127,044,220,692.56 (One hundred and twenty-seven
Billion, forty-four Million, two hundred and twenty thousand, six hundred and
Ninety-two Naira, fifty-six Kobo).
4.0. Offences and
Penalties Under Stamp Duties Act
It is imperative to note that failure to comply with
the provisions of the Stamp Duties Act may generally result in any of the
Prosecution for offences under the Act, payment of
penalties or fines of various degrees, inability to use the relevant instrument
as evidence in court or other judicial or quasi-judicial proceedings and may
face enforcement actions by the relevant tax authority under Sections 110 &
111 of Stamp Duties Act etc.
Below are specific offences, penalties and fines
provided under the Stamp Duties Act:
- Failure to disclose all the relevant facts and circumstances on an instrument
to defraud the Government, a fine of =N=40 on conviction. [S.9 SDA]
- Any person who neglects or refuses to cancel an adhesive stamp is liable to a
fine of N20 [S.11 (3) SDA]
- Fraudulent removal of adhesive stamps, or where any person sells or affixes to
any other instrument or uses for any postal purpose any adhesive stamp which
has been so removed, with the intent that the stamp may be used again, or sells
or offers for sale or alters any adhesive stamp which has been so removed shall
be guilty of an offence and liable on conviction to a fine of N100 [S.13(1)
& (2) SDA].
- Any approved person that enrols, registers or enters in or upon any rolls,
books or records any instrument chargeable with duty, which is not duly stamped
shall be guilty of an offence and liable on conviction to a fine of N20 [S.25
- Failure to stamp a document within the prescribed period of 40 days as
provided, a penalty of N Where the penalty exceeds N20 an additional penalty at
the rate of ten per cent. [S.23(1) SDA].
- Failure to prepare a duly stamped instrument of admission or to make a duly
stamped register attracts a fine of N20 on conviction [S.27(2)SDA].
- Refusal of an appraiser to write out the amount of valuation and duly stamp
same within 14 days after the making thereof, or if he first discharges the
amount of the appraisement or valuation attracts a fine of N40 on conviction
- Issuing any unstamped bill or note, a fine of N20 on conviction [S.42(2) SDA].
- Failure to stamp any policy of insurance within one month, a fine of N40
against every person that makes or delivers the policy or receives or takes
credit for any premium or consideration. [S.87 SDA].
- Any person that gives a receipt liable to duty and not duly stamped, or refuses
to give a receipt duly stamped or upon payment of an amount of N400 or upwards,
gives a receipt for a sum not amounting to N400 or separates or divides the
amount paid with intent to evade the duty, a fine of N20 on conviction [S.92
- The Managing Director of a company, the Secretary and other principal officers
that issue a share warrant or any instrument to bearer without being duly
stamped will be liable to a fine of N100 on conviction. [S.96 SDA].
- Every person to whom a stock certificate to bearer or an instrument to bearer
chargeable as a stock certificate to bearer is issued without being duly
stamped shall be guilty of an offence and be liable to a fine of N[S.98(2)
- Every person that executes, receives, issues or takes by way of security any
warrant for goods not being duly stamped will be liable to a fine of N40 on
conviction. [S.99(3) SDA].
5.0. Challenges in the
Administration of Stamp Duties Act
- With respect to the appointment of a Stamp Duty Commissioner, the Act did not
state the qualification requirement of a person that can be appointed to the
position. This office requires an officer that is experienced in the field of
taxation to be able to adjudicate on an instrument presented effectively.
Stamp Duties Act did not make provision for enforcement of the
non-admissibility of unstamped instruments despite the admissibility in
principle. There is no sanction on those that violate the principle or on those
that accept unstamped instruments.
stamped documents are still being accepted for registration without recourse to
verification from the Tax Revenue Authorities.
- Section 22(1) of SDA requires judges, magistrates, arbitrators or referees to
take notice of whether any instrument tendered before it has been duly stamped
as required by law, but in practice, such has not been done and no action is
Stamp Duties Act is obsolete in context and content. A perusal through the
sanction, penalty, fines and interest payable under the Act reveals that they
are ridiculously low and do not reflect the current economic realities and the
policy direction of the government.
rates of Stamp Duties on some instruments are too low and have led to a
reduction in the needed tax revenue by the government.
Act did not provide clear guidelines on matters of residency. For example,
where an instrument is executed by a person that resides in more than one
state, the Act is unclear about which tax authority he is to pay to.
- There is a serious lack of awareness by taxpayers on the instruments that are
subject to Stamp Duties and their respective rates in Nigeria.
Joint Tax Board should intensify efforts in creating public awareness on
instruments that are required by law to be stamped and relevant fees payable.
Stamp Duties Act should be reviewed, re-organized, re-defined, simplified and
should also state the extent and limit of the Commissioner's powers, harmonize
the list of instruments and increase the rates applicable to reflect current
economic realities and the policy direction of the Government concerning job
creation in order to encourage investment.
special division of Federal or State High Courts should be assigned to handle
stamp duties related matters where stamp duties offenders will be prosecuted to
serve as a deterrent to others who might want to carry out such an act.
- Those responsible for implementing the law should intensify efforts in
increasing awareness of its provisions through adequate publicity and give
legal backing to ensure its effective enforcement by the authorities concerned
to carry out regular inspection visits to all relevant agencies responsible for
the keeping of rolls, books or other instruments liable for duty.
- Effective collaborations should be created between the Federal Inland Revenue
Service (FIRS), States Internal Revenue Service (SIRS) and other relevant
- Inspection visits to all organizations where dutiable instruments are lodged
for verification to recover unpaid duties will surely serve as a veritable tool
for ensuring compliance with the law and increase in revenue accruing to
governments at various levels from Stamp duties.
- More powers should be given to the Commissioners to enable them to make
inspection visits to courts, land registries and other places where these
instruments are being used without recourse to confirmation or verification.
manner of office copy archiving should be modernized from the traditional way
of stockpiling to an electronic system of scanning and storing using high
The whole world is presently affected by the Covid-19
pandemic which has obliterated the economy of many Nations globally; Nigeria
inclusive. There is therefore a need for Nigeria to look inward for ways of
funding its huge budget and reduce its yearly challenge of budget deficit
through increased tax revenue generation. Overhauling stamp duties
administration is a veritable tool for achieving this purpose in line with the
current National Tax Policy direction which is tailored towards increasing
indirect taxes such as Value Added Tax (VAT) and Stamp Duties (SD) while at the
same time reducing direct taxes such as Company Income-tax (CIT), Education
Tax, Capital Gain Tax (CGT) etc.
Download Here - Finance Act 2020
- Administration of Stamp Duties in Nigeria Under The Finance Act -
Part 3 - Sep 26, 2021
- Administration of Stamp Duties
in Nigeria Under The Finance Act - Part 2 - Sep 10, 2021
- Administration of Stamp Duties
in Nigeria Under The Finance Act - Sep 03, 2021
Related News on Finance
- LIRS Issues Public Notice on Amendments to PITA Introduced by
Finance Act, 2020
- Nigeria's Finance Act 2020: Insights Series and Sector Analysis
- Finance Act, 2020: Impact Analysis
- Finance Act 2020 And Its Impact on Employment Tax
- Finance Act 2020: Highlights of Latest Developments in Nigeria's Tax
- Implications of Finance Act 2020 for Individuals and Labour
- Finance Act 2020: Key Changes and Implications
- Finance Act 2020: Unclaimed Dividends and Dormant Balances
- 20 Key Changes in the New Finance Act 2020
- Senate Passes Finance Bill 2020
- Finance Bill 2021: Stakeholders Engagement Begins
- Finance Act, 2019: Tax Implications for the Private Equity Industry
- Stamping of Electronic Documentations Under the Stamp Duties ACT as
Amended by the Finance ACT
- FIRS Clarifies Changes Introduced to Nigerian VAT Regime by the
Finance ACT 2019
- Matters Arising from Implementation of Finance Act 2019
- Finance Act 2019: Minister Clarifies the Meaning of Significant
- The Finance Act 2019 Introduced an Amendment to the CITA to Tax a
- FIRS Finance Act Circular: Amendments to the Stamp Duties Act
- FIRS Issues Clarification on Sundry Provisions of The Finance Act
2019 as it Relates to CIT Act
Related News on Stamp
- State Attorney Generals Sue AGF Over Stamp Duty Administration
of Stamp Duties in Nigeria Under The Finance Act - Part 2
- Administration of Stamp Duties in Nigeria Under The Finance Act
- FHC Upholds the Illegality of Stamp Duty Deductions Prior to
Amendment of the SDA
- Revision of Stamp Duty on NSE Transactions to 0.08% from 0.075%
Effective 7th December 2020
- Much Ado About the FIRS' 6% Stamp Duty on Leases
- Oil Marketers Kick Against N50 Stamp Duty
- Merchants Prohibited From Assessing Any Duty or Costs Characterised
As Stamp Duty On Consumers
- Government Reviews Stamp Duty Charge
- Financial Services Agents Call On CBN To Address Stamp Duty Charges
- RMAFC Set to Audit Deposit Money Banks Over Stamp Duty Collections
- Stamp Duty Under the Banking System
- N50 Stamp Duty: Banks begin execution, lists exemptions but still
have many issues unanswered
- FIRS Provides Clarifications on Administration of Stamp Duties in